Markets will be range bound for a while now
As discussed yesterday, there was a repeat performance on the Nifty with the markets trading well within the range established on Friday. Today, given the positive global cues, the Nifty is likely to open with a positive gap. But, yet again, will this positive opening be sustained? or will the Bears try their strength? A bit of technical analysis will offer some clarity.
1) The Elder Ray readings : Bull Power reduces from +119 to +85 Bear Power rises from +49 to +33. This is suggesting that the Bears are gaining power but are yet in the positive zone. However, the Bulls are losing steam and a follow up buying is required for them to show some strength. First indication of range bound movements, with a slight negative bias.
2) The EMAs continue to point upwards, however the 100 and 200 DMAs are still pointing downwards, indicating weakness at higher levels in the Nifty.
3) The stochastics are in the neutral zone, but are perilously close to the overbought zone. Again indicating that there is some head room for the Nifty to move upwards.
4) In the above chart, the volumes have been on the decline, indicating lack of participation. The MACD is rising but the histogram is falling. The Bollinger bands are contracting slowly. The ADX is showing lack of strength in both the up and the down trends. The Nifty has formed a doji in the supply zone.
5) Based upon above observations, it would be prudent for us to take positions hoping that the Nifty would trade in a tight range of about 100 points with 5350 as a resistance and 5250 as a support.
6) Our trading plan for the day thus, is as under
a) Around 5340 we will open short positions with a SL of 5360 and a target of 5260. We will add to these short positions only below 5210.
b) Around 5250 we will open long positions with a SL of 5225 and a target of 5320. We will add to these long positions only above 5380.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
As discussed yesterday, there was a repeat performance on the Nifty with the markets trading well within the range established on Friday. Today, given the positive global cues, the Nifty is likely to open with a positive gap. But, yet again, will this positive opening be sustained? or will the Bears try their strength? A bit of technical analysis will offer some clarity.
1) The Elder Ray readings : Bull Power reduces from +119 to +85 Bear Power rises from +49 to +33. This is suggesting that the Bears are gaining power but are yet in the positive zone. However, the Bulls are losing steam and a follow up buying is required for them to show some strength. First indication of range bound movements, with a slight negative bias.
2) The EMAs continue to point upwards, however the 100 and 200 DMAs are still pointing downwards, indicating weakness at higher levels in the Nifty.
3) The stochastics are in the neutral zone, but are perilously close to the overbought zone. Again indicating that there is some head room for the Nifty to move upwards.
4) In the above chart, the volumes have been on the decline, indicating lack of participation. The MACD is rising but the histogram is falling. The Bollinger bands are contracting slowly. The ADX is showing lack of strength in both the up and the down trends. The Nifty has formed a doji in the supply zone.
5) Based upon above observations, it would be prudent for us to take positions hoping that the Nifty would trade in a tight range of about 100 points with 5350 as a resistance and 5250 as a support.
6) Our trading plan for the day thus, is as under
a) Around 5340 we will open short positions with a SL of 5360 and a target of 5260. We will add to these short positions only below 5210.
b) Around 5250 we will open long positions with a SL of 5225 and a target of 5320. We will add to these long positions only above 5380.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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